With this strategic move, Facebook is trying to easing into the online retail market which is dominated by the likes of Amazon.com Inc and Walmart Inc.
Facebook-owned Instagram stated, it is testing a feature that allows U.S. users to shop and purchase items that have been tagged for sale through its “checkout” feature.
The unveiling of the feature is in line with Facebook’s strategy to monetize its high-growth businesses, such as Instagram; it comes in the wake of its centerpiece News Feed product struggling to generate fresh interest.
To this end, Facebook has partnered with more than 20 brands including Kylie Cosmetics, Adidas, H&M, and Michael Kors on its shopping feature;
Its feature allows U.S. Instagram users to click on a product featured in a post, see its price, and click again to bring up an order form.
Shoppers can checkout and pay via American Express, Visa, Discover, PayPal or Mastercard. Previously, Instagram allowed brands to link to their respective websites for users to make purchases.
“Facebook’s track record on privacy is the bigger issue (that) may negatively affect the launch of in-app purchases,” opined Gabriella Santaniello, founder of retail research firm A line Partners. “I would expect there to be some reticence when inputting your credit card information upon checkout.”
Facebook, the world’s largest social network is under intense pressure to significantly boost its handling of personal data following a number of controversies related to user privacy on its platform.
Incidentally, Instagram did not specify any financial details of its partnerships; It just stated, it would introduce a selling fee to help fund transaction-related expenses.
The development comes in the wake of a similar feature launched last year by rival platform Pinterest Inc, which introduced its “Product Pins” that provides prices and links to retailers’ checkout pages for making purchases.
Instagram stated, it has more than 130 million users who tap for product tags in shopping posts every month, up from 90 million in September 2018.
Facebook has plans to evolve Instagram and Messenger into robust e-commerce platforms where users can click on ads and buy products, said Ivan Feinseth, an analyst with Tigress Financial Partners.









